Poor drug solubility remains a significant and frequently encountered problem for pharmaceutical scientists. Lipid formulations are one of the approach to enhance rate and extent of oral absorption for poor drug soluble drugs, because along with drug solubility it enhances drug permeability. Self emulsifying drug delivery system (SEDDS) composed of oils, surfactants and cosolvents which emulsify under conditions of gentle agitation, similar to those which would be encountered in the gastro-intestinal tract. But the solubility of the drugs in these medium and the proportion of ingredients taken are the most important criteria to have a proper, stable SEDDS. Thus, only very specific pharmaceutical excipients combinations will lead to efficient self-emulsifying systems. This review provides a comprehensive summary of the mechanism, development, characterization of SEDDS. SEDDS appears to be a unique and industrially feasible approach to overcome the problem of low oral bioavailability associated with the lipophillic drugs.